In today's world, getting a personal loan has become much easier with Aadhaar-based verification. The Aadhaar-based identification system has streamlined loan processing with the inclusion of both biometric and demographic data. Using an Aadhaar card can also help in ensuring faster compliance with the Know Your Customer (KYC) process. Using your Aadhaar Card to avail of a loan can also result in relatively less paperwork, making personal loans more accessible for everyone.
Whether you do not have a salary slip or have a need to raise urgent funds, your Aadhaar card can be the key to getting an instant personal loan. Here's a detailed guide on how to avail a loan using your Aadhaar card:
How Aadhaar-Based Personal Loans Work
Personal loans availed using an Aadhaar card are based on easy KYC procedures. Providing your Aadhaar number issued by the Unique Identification Authority of India (UIDAI) helps in identifying your identity, address, and biometrics.
Borrowers who do not have salary slips can also present their bank statements for the last six months before the lender. The lender uses these documents to analyse the financial status of the borrower. The amount of loan which can be availed using an Aadhaar card generally ranges between Rs 10,000 to Rs 35 lakh. However, the amount which the bank lends is based on the applicant's creditworthiness and the lending policy of the financial institution.
Eligibility Criteria
Borrowers must meet certain requirements to apply for a personal loan using your Aadhaar card:
1. Age
Applicants should be residents of India with an age range of 20 to 60 years. Candidates below 40 years are generally granted loans at lower interest rates as they are considered more creditworthy. However, applicants above 50 years of age may have to pay a higher rate of interest due to increased risk.
2. Employment Status
Applicants who are salaried employees of public or private sector organisations or self-employed and have at least one year of stable income can apply for personal loans using an Aadhaar card. Some lenders mandate a minimum monthly salary, usually between Rs 15,000 and Rs 30,000. Generally having a higher income and job stability can lead to better loan terms.
3. Credit Score
A credit score of 600 or above is generally preferred by lending institutions. Applicants with higher credit scores may secure loans at lower interest rates, while those with lower scores might still be eligible but may get the loan at a higher rate.
Aadhaar-Based Loan Features and Costs
1. Interest Rates
The interest rates for Aadhaar-based personal loans are usually between 10.49 per cent and 14 per cent per annum. However, the interest rate at which you get the loan depends on factors such as your income, employment type, and credit score.
2. Repayment Tenure
Loan tenures can go up to 8 years, though this varies across financial institutions.
3. Processing Fees
Lenders charge a nominal processing fee, usually between 0.5 per cent to 5 per cent of the loan amount, along with applicable taxes.
Steps to Apply For a Personal Loan Using an Aadhaar Card
1. Research and Select a Lender: Compare the interest rates, eligibility criteria, and repayment terms of different banks or Non-Banking Finance Companies (NBFCs) and choose the lender that suits your financial requirements best.
2. Find the Aadhaar-Based Loan Facility: Open the website or mobile application of the lender and click on the personal loan tab. Find the Aadhaar-based loan facility and click on the 'Apply' tab. You can usually find it under the banking products or loans section.
3. Fill in the Application Form: Provide your personal details, employment information, and any other information which may be asked for by the lender.
4. Submit Documents: Upload your Aadhaar card, bank statements, and any other requested documents for KYC verification. The process typically takes a few minutes.
5. Approval and Disbursement: Once verified, your loan application will be approved, and the funds will be disbursed directly to your bank account.
Benefits of Aadhaar-Based Personal Loans
1. Quick Processing: With Aadhaar's smooth KYC, loan approvals happen comparatively faster.
2. Minimum Documentation: You will just require an Aadhaar card and some extra documents, such as a bank statement for documentation.
3. Adjustable Loan Sums: Amounts that can be borrowed vary from Rs 10,000 to Rs 35 lakh depending on the eligibility.
4. Flexible Repayment Options: Select a repayment tenure as per your financial stability.
Instant personal loans on Aadhaar cards have revamped the borrowing experience, making it more convenient, speedy, and easy to access. Now, whether an expense unexpectedly arises or some significant purchase, the Aadhaar card can streamline the loan procedure and offer rapid financial relief.
Before applying, compare several lenders to ensure you get the best interest rates and terms. You can also work on maintaining a good credit score and stable income to increase your chances of getting approved and getting better terms. With a little research and financial discipline, you will be able to make the most of this simplified borrowing option.
